NFO review: Mirae Asset Healthcare Fund

Mirae Asset Mutual Fund is launching a new sector scheme with a focus on healthcare and allied sectors. The New Fund Offer (NFO) of the scheme, Mirae Asset Healthcare Fund, will open for subscription on 11 June, and close on 25 June. The scheme will be managed by Vrijesh Kasera.

According to the scheme information document, the scheme will invest in equity and equity-related securities of companies benefiting directly or indirectly from the healthcare and allied sectors in India.

The scheme will invest at least 80 per cent of the corpus in pharma, healthcare and allied sectors. “The scheme will follow a bottom-up approach that aims to identify growth companies with high return ratios (ROE) and sustainable competitive advantage," the fund house said.

The sector fund has the flexibility to invest across market capitalisation and style in selecting investment opportunities within the healthcare theme. The scheme documents suggest that the scheme is going to follow a concentrated portfolio of 30-40 stocks.

Should you invest?The pharma fund category hasn’t been doing well for the past two-three years, and experts believe the pharma sector is unlikely to recover anytime soon. They believe that pharma funds might take a couple of years to perform.

Many mutual fund advisors do not recommend sector schemes to investors, as they believe these schemes are meant for sophisticated investors.

“We generally do not recommend sector schemes but aggressive investors can invest 5-10 per cent (of their total corpus in them) for diversification,” says Vishal Dhawan, Founder, Plan Ahead Wealth Advisors. However, Dhawan does not favour investing in a new scheme. “If you want to bet on the pharma sector, you should opt for schemes with a consistent track record. Going for a new scheme doesn’t make sense until it has something which the established schemes do not offer,” says Vishal Dhawan.